Update 10/10/12- It appears some cardholders are getting a similar notice in their October statements. You will earn a reward of 6% on the first $6,000 of eligible purchases at supermarkets in a calendar year (supermarkets do not include superstores or warehouse clubs); 1% on all other eligible purchases. While this may not have a tremendous effect on those purchasing only groceries, this is clearly an attempt at shutting down the giftcard loophole.
The American Express Preferred ® credit card updated one major aspect of cashback program, so I thought it would be of some benefit to compare the Blue Cash Everyday® Card from American Express to the Blue Cash Preferred® Card from American Express. Both programs earn card holders cash back, for those not interested in earning miles or points, oh my.
| Card |
New Member Bonus |
Cashback |
Annual Fee |
| Blue Cash Everyday® Card from American Express |
$100* |
• 3% at US supermarkets, up to $6,000 per year in purchases
• Earn 2% at US gas stations & select US dept stores
• Earn 1% cash back on all other eligible purchases. |
$0 |
| Blue Cash Preferred® Card from American Express |
$150** |
• Earn 6% US supermarkets up to $6,000 per year in purchases
• Earn 3% US gas stations & select US dept stores
• Earn 1% cash back on all other eligible purchases. |
$75 |
* Earn 100 Reward Dollars after you make $1,000 in purchases in the first three months of Card membership.
** Earn 150 Reward Dollars after you make $1,000 in purchases in the first three months of Card membership.
As you can see from the above, the major difference between the two cards is the amount of cashback earned at supermarkets relative to the annual fee. However, the $75 annual fee on the Blue Cash Preferred® Card from American Express almost instantly gets lost when considering the real benefits of the card.
Spending only $25 per week will rack up $78 in cashback over the course of a year, more than enough to cover the fee. Even when I was single, I spent more than $25 per week on groceries. Our family of four (4), with two young boys, spends around $600/month on groceries, effectively resulting in $36/month in cashback by using the Blue Cash Preferred® Card from American Express. That is quite a substantial rebate, and thus why you can see how easily the annual fee gets lost in the benefits of the card; however, it is time to start thinking outside the box.
What does almost every major grocery store sell on end caps and near the checkout? Gift cards, which could potentially be the real money maker here. Want to dine at chain restaurants like Red Lobster, Subway, Red Robin, or the Olive Garden? What about purchasing home improvements from Home Depot or Lowes? Going to Disney, Universal Orlando Resorts, or staying at a Marriott? Purchase a gift card from the grocery, earning a whopping instant 6% rebate.
The warning to avoid any potential problems is to make sure you are also picking up some type of grocery item when purchasing the gift cards. All purchases at supermarkets should code properly to earn the 6% cashback bonus, but making a grocery purchase makes sure not to send up any potential red flags.
The point is, the Blue Cash Preferred® Card from American Express just opened up some great possibilities to be able to rake in cashback. With a little bit of planning, and buying the right gift cards, one can effectively take 6% off of almost all purchases. I like that!
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5/9/13- Updated matrix; removed banner
7/12/12- Originally published.
